Monday, June 16, 2008

X Letter to the Malay Mail

Citizen X. You can assume that Citizen X, who wrote the letter to Malay Mail entitled "My 230 sen view", is someone who was there helping us out back in 1997 and who's as pissed off as you and I on the subject of the recent 41%-63% petrol/diesel price increase.

"Ever since fuel prices accelerated at an unfamiliar pace since 2005, we have been behaving like schoolboys on their first science project, testing hypothesis and making assumptions as if there's no real or permanent impact on our surroundings. From the manner the last two fuel increases have been announced, it is obvious that we have not done sufficient research on this critical subject.

"Making announcements at the last minute, promising no increase yet doing so subsequently, preaching changes in lifestyles to the rakyat is not on."

The writer went on asking about MTEN, the body that "went 'deep and wide' in addressing the financial crisis of 1997".

After years of reading the same letters sent in by the same writers in the other papers, Citizen X's epistle in Malay Mail is a refreshing change.

It's a tragedy that those who know how to run the country are bloggers, taxi drivers and office workers lepaking in the coffee shops.

I support the fuel price hike. I have 6 children so I need a van to move the whole family around. Because of that I'm not entitled to the cash rebate and I still pay higher road tax those who are getting the cash. Before the free text books came about, my 6 kids could never be entitled to text books loan because my monthly salary is slightly over RM3000. Evey year I diligently pay my income tax while the many don't need to.

Before I could afford to enter college, for 3 years I worked odd jobs in construction sites and tuna fishing ships while others got scholarships even tho their exam results were poorer than mine.

Today I have to self-sponsor my private college-going daughter as she's not one of those fortunate ones who got JPA scholarships even tho her SPM results are just as good.

"....MTEN, the body that "went 'deep and wide' in addressing the financial crisis of 1997".=============================But then times have changed. This PM, does not need the likes of a MTEN since he has the valuable counsel of an all-knowing SIL. He need not consult any company CEO's or the presidents of other BN parties or the stupid citizens.

"Making announcements at the last minute, promising no increase yet doing so subsequently...."Looks like some people have made millions of ringits at our expense.Who says there is no "planning"?Look at the price of TNB shares now and you will agree that there has been some strategic planning....albeit not for national interests but the interests of somebody!

Most of letters which gets printed in the Letters To Editor column comes from some 'running dog' Editors themselves.That's why we often get the feeling that NST/BH readers are morons.Similar to TV3, the mainstream media (esp NST/Star/BH) are screwing themselves why printing/airing utter-rubbish in their attempt to silence their critics.The main item on TV3 lastnite was on how the Kedah MB had failed to do anything significant for the state in his first 100 days. They also ridiculed the Kedah govt for reducing 50% allocation for the Sultan's anniversary do.See what I mean? These MSM guys are out-doing each other in their race to Tanjung Rambutan and Tampoi!

The Bn govt talks C lah blaming on the global price hike on petrol. What if the price of petrol drops to US$10 a barrel? If that did happen, would that benefit Malaysia as an nett oil exporting country?Ah Beng

why not start from the simple premise that no one owes you a living? certainly not the state.

and another premise - that subsidies encourage wasteful consumption?

do all the complaining malaysians (and the opposition) have any idea of the true costs of producing/manufacturing petrol, diesel, treated water and electricity? or food items like rice, sugar, cooking oil, flour etc?

no one wants to stand up and acknowledge the fact that fuel prices, even after the recent price hikes, are still amongst the cheapest in asia. u wanna explain that?

if you want to "hantam" the govt - then let it be over the fact that it did ****-all to bring in the investments and create the well-paying jobs that would have resulted in a comparitively well-off malaysian middle class. or the failure to make the national education system capable of producing graduates who would be in demand, instead of rushing to apply for jobs in the civil service?

it is easy to demonstrate for cheap fuel, water, electricity and food. never mind if the producing companies can't meet their costs and have to go back to the govt for bail-outs.

anwar ibrahim and his cohorts in the opposition (including the economics whizzkids in the dap) are guilty, at the very least, lacking knowledge of basic economic fundamentals. at the worst, they may be guilty of deliberately misleading malaysians who may not be conversant with the effects of globalisation.

playing to the gallery and rousing emotions is all too easy. umno has done it many times before. looks like anwar and his cohorts have learnt their lesson well.

skilgannon, I second that. Although I don't think it's so much that they lack knowledge in these basic economic fundamentals, just the temptation is so strong that which one to choose becomes really easy.

Hahaha, you serious surind? If I had a blog I would put it up. Anyway, what is needed is more People's Champions, I agree with another comment here that bloggers of all backgrounds should be special advisors & able to influece Malaysian political parties especially Pakatan.

So what you say is true.

Suprised beer duty is so high in Malaysia as I have not been down for a few years. Cigarettes are still cheaper compared to most other developed countries though.

I think most Malaysians have accepted the fact that the cost of living will go up because the cost of manufacturing and production has gone up. What many find hard to swallow is the abrupt manner in which the latest fuel hike has been done and the perceived off-handed reaction of the government to public feedback. The phrase "Change your lifestyle" is suspiciously reminiscent of the rather notorious quote "Let them eat cake", especially when followed by the announcement that ministers will only have to suffer a 10% reduction in their entertainment allowances and the insufferability of having to limit their all-expenses paid vacations to ASEAN countries. Add to it escalating public anger over the ongoing revelations of the decades of fiscal waste and mismanagement (fed in no small part by corruption) and you'll understand why so many people can identify with what Citizen YZ said. In Sarawak, many of the lower working class like coffeeshop workers, cleaners and security guards, survive on monthly salaries of RM400 to RM600. These are the people who will be hit the hardest by the fuel rise and the subsequent price increases in other areas. What do you expect them to do? They already have so little resources to make ends meet. Things like subsidized healthcare is a god-send for people like these who can't even afford to spend RM1 for the bus ride to the govt hospital, much less the nominal RM5 hospital fee. The current palpable public anger and frustration is definitely more than just about the recent oil price increase.

Certainly the government does not owe anyone an honest living, but neither should it deprive each of its citizens - regardless of race or religion - of the opportunities to earn an honest living. Can anyone say industry monopolies, opaque public tenders, AP permits, racially-motivated education policies, and other forms of artificial restrictions? Let's also not forget political pressures on the corporate sector to bypass free market mechanisms, especially "forcing" GLCs to operate relatively inefficiently by making them award absurdly one-sided deals to certain private companies (e.g TNB and the IPPs).

But back to the issue of subsidies, which I agree, can do a lot of bad. But we should not be blind to the good it offers to help those most in need of it, barring of course, crooked implementation and biased distribution. Ideally, subsidies should only be temporary and not be seen as a permanent cure to a problem. On a side note, it's interesting that the government does not seem so keen on dismantling monopolies in certain sectors in its quest to promote the free market. Monopolies are equally as guilty of distorting market prices, and perhaps more harmful in reducing Malaysia's long-term global competitiveness.

"no one wants to stand up and acknowledge the fact that fuel prices, even after the recent price hikes, are still amongst the cheapest in asia. u wanna explain that?"

I'm not an economist, but here's how I understand it: Malaysia might have the one of cheapest priced oil, but in purchasing power parity (PPP) terms, it's of little use or comfort.

Recently, our national newspapers such as the NST and the Star trumpeted the fact that Singaporeans pay significantly more than Malaysians for their petrol. On May 16, Singaporeans were paying S$2.210 (approximately RM5.24 at today's exchange rate on xe.com) per litre of Shell Formula 98 (unleaded) according to www.petrolwatch.com.sg. This is about 94% more than the RM2.70 per litre we are currently paying at the pump. What the newspapers did not mention was that the average Singaporean earns 2.7 times more than the average Malaysian. Using PPP, Singaporeans are still paying less for their petrol.

From the CIA World Factbook: https://www.cia.gov/library/publications/the-world-factbook/index.html

Let's also remember that Singapore is not an oil producing country. Their local petrol price would include transportation and logistics expenses, misc. trade processing costs etc. Malaysia is an oil producing country. Shouldn't production costs be cheaper since it is local, and shouldn't the retail prices be lower as well to reflect the lower costs of production? Anyway, even if Malaysians paid full price for petrol, not many would have the confidence that the money would be put to good use (i.e. back into the pockets of the people through channels such as better public transportation, public utilities, education etc) rather than into the pockets of a few selected cronies.

just a little note. using yr gdp per capita (at ppp) argument, petrol prices in india and thailand should be lower than that in malaysia - because per capita gdp in india and thailand is lower than malaysia.

but petrol prices in india and thailand are higher than malaysia's.

care to explain that?

it is my contention that the msian govt should only subsidise three things:

"just a little note. using yr gdp per capita (at ppp) argument, petrol prices in india and thailand should be lower than that in malaysia - because per capita gdp in india and thailand is lower than malaysia.

but petrol prices in india and thailand are higher than malaysia's.

care to explain that?"

Perhaps I should have been more detailed in my earlier post. I included Indonesia and Thailand's GDP figures to give readers a rough idea how Malaysian average income stacks against its nearest neighbours. Calculating GDP per capita at PPP in US$ makes it easier to compare average income levels between countries use of standardized international dollar price weights. A higher GDP per capita (PPP) only means that on average people in that particular country earn higher wages. Higher GDP per capita (PPP) in a particular country does not necessarily mean that people pay comparatively higher prices for goods and services in that country. Likewise lower GDP per capita (PPP) does not mean that people living in that country must may lower prices for their goods and services (including petrol).

In my first reply, I argued that on average, Singaporeans were earning more than Malaysians. On top of that, Singaporeans are also paying less for petrol, in terms of PPP because they use a smaller percentage of their respective average income to buy a liter of petrol. Thus, the impact of rising oil prices is likely to affect the average Malaysian more than the average Singaporean because the average Malaysian uses a relatively larger portion of his/her income to buy a liter of petrol. Therefore, my argument still holds. I'm not sure where you got the idea I was implying higher GDP per capita (PPP) means higher petrol prices and vice versa.

Btw, I read somewhere that even though Thais pay more for petrol, they pay much less for cars compared to Malaysians. Not sure whether this is because there are many auto manufacturing facilities in Thailand or because their road, insurance and/or vehicle taxes are lower.

With regards to the remainder of your reply, I am basically on the same side as you on most points if you look at my first post.